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In an economy with asymmetric information, learning agents understand
that information is conveyed by the price system. Taking account of the
information in the price system, they adjust their decisions accordingly. The
amount of information contained in the price depends on the market structure
as well as the decisions of all the agents.Hence, learning and decisionmaking cannot be separated, but are integrated through the price systemThe relationship between the informativeness of the price and the market
outcomes must be studied by taking account of the price system and its
interaction with the learning activity and the decisions of all agents.
This paper studies learning in perfect competition. To that end, we embed
learning in a model in which a perfectly competitive, representative firm,
which has complete information about the market, sells a good whose quality
in unknown to some buyers.1 D
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